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CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT (the "Agreement") is made and
entered into as of the 10th day of August 2007, by and between
Pacific Coast National Bank (the "Bank") and David L. Adams (the
"Executive"), a resident of Orange County, California (the
signatories to this Agreement will be referred to jointly as the
"Parties").
WITNESSETH:
WHEREAS,
the Bank is a wholly-owned subsidiary of Pacific Coast National
Bancorp (the "Company"),
WHEREAS,
both Bank and Executive have read and understood the terms and
provisions set forth in this Agreement and have been afforded a
reasonable opportunity to review this Agreement with their
respective legal counsel.
NOW,
THEREFORE, in consideration of the mutual promises and covenants
set forth in this Agreement, and for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, Executive and Bank agree as follows:
1.
At-Will Employment . Executive's employment at the Bank is
for an unspecified term and will continue only at the mutual will
of both Executive and the Bank. This means either Executive, or the
Bank, may terminate Executive's employment at will at any time,
with or without cause or notice. This "At-Will" aspect of
Executive's employment may not be modified, amended or rescinded
except by an individual written agreement to the contrary signed by
both Executive and the Bank's President or Chief Executive Officer.
Notwithstanding the terms of this Agreement, Executive's employment
shall be subject to all of the applicable Bank policies and
procedures, as amended from time to time, relating to employment
and personnel matters.
2.
Change in Control . Upon a Change in Control which occurs
during the time Executive is employed by the Bank, the Bank shall
pay to Executive a cash lump sum payment equal to 199% of his Base
Amount as defined in section 280G(b)(3) of the Internal Revenue
Code of 1986, as amended ("Change in Control Payment"); provided,
however, if the Change in Control Payment to Executive would cause
the Bank to contravene any law, regulation or policy applicable to
the Bank, the Bank and Executive agree that such Change in Control
Payment shall be made to the extent permitted by law, regulation
and policy, and the remainder of such Change in Control Payment
shall be made from time to time at the earliest time permitted by
law, regulation and policy. For purposes of this Agreement, "Change
in Control" means:
(a) a
change in the ownership of the capital stock of the Bank or the
Company, whereby a corporation, person, or group acting in concert
(other than the current members of the boards of directors of the
Company or the Bank or any of their descendants, the Company, the
Bank, or any savings, pension or other benefit plan for the benefit
of the employees of the Company or the Bank or subsidiaries
thereof)(a "Person") as described in Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), holds
or
acquires, directly or indirectly, beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of a
number of shares of capital stock of the Company or the Bank which
constitutes fifty percent (50%) or more of the combined voting
power of the Company's or the Bank's then outstanding capital stock
entitled to vote generally in the election of directors;
(b) the
persons who were members of the board of directors of the Company
or the Bank immediately prior to a tender offer, exchange offer,
contested election or any combination of the foregoing, cease to
constitute a majority of the board of directors of the Company or
the Bank, as applicable;
(c) the
consummation by the board of directors of the Company or the Bank
of a merger, consolidation or reorganization plan involving the
Company or the Bank in which the Company or the Bank, as
applicable, is not the surviving entity, or a sale of all or
substantially all of the assets of the Company or the Bank. For
purposes of this Agreement, a sale of all or substantially all of
the assets of the Company or the Bank shall be deemed to occur if
any Person acquires (or during the 12-month period ending on the
date of the most recent acquisition by such Person, has acquired)
gross assets of the Company or the Bank, as applicable, that have
an aggregate fair market value equal to fifty percent (50%) or more
of the fair market value of all of the respective gross assets of
the Company or the Bank immediately prior to such acquisition or
acquisitions;
(d) a
tender offer or exchange offer is made by any Person which is
successfully completed and results in such Person beneficially
owning (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) either fifty percent (50%) or more of the Company's
or Bank's outstanding shares of common stock or shares of capital
stock having fifty percent (50%) or more of the combined voting
power of the Company's or Bank's then outstanding capital stock
(other than an offer made by the Company or the Bank), and
sufficient shares are acquired under the offer to cause such person
to own fifty percent (50%) or more of the voting power;
(e) a
dissolution or liquidation of the Company or the Bank; or
(f) any
other transactions or series of related transactions occurring
which have substantially the same effect as the transactions
specified in clauses (a) - (f);
provided however that, a shareholder or shareholders may make
the following transfers and such transfers shall be deemed not to
be a Change in Control: (i) to any trust described in section
1361(c)(2) of the Code and that is created solely for the benefit
of any shareholder or any spouse or lineal descendant of any
shareholder; (ii) to any individual by bona fide gift;
(iii) to any spouse or former spouse pursuant to the terms of
a decree of divorce; or (iv) to any officer or employee of the
Company or the Bank pursuant to any stock option plan established
by the shareholders of the Company or the Bank.
3.
Non-Disclosure and Confidentiality.
(a) Executive
acknowledges that, by the nature of his duties, he will or may have
access to and become informed of confidential, proprietary, and
highly sensitive
information relating to Bank and which is a competitive asset of
Bank, including, without limitation, information pertaining to:
(i) the identities of Bank's existing and prospective
customers or clients, including names, addresses, credit status,
and pricing levels; (ii) the buying and selling habits and
customs of Bank's existing and prospective customers or clients;
(iii) financial information about Bank; (iv) product and
systems specifications, concepts for new or improved products and
other product or systems data; (v) the identities of, and
special skills possessed by, Bank's employees; (vi) the
identities of and pricing information about Bank's suppliers and
vendors; (vii) training programs developed by Bank;
(viii) pricing studies, information and analyses;
(ix) current and prospective products and inventories;
(x) financial models, business projections and market studies;
(xi) Bank's financial results and business conditions;
(xii) business plans and strategies; (xiii) special
processes, procedures, and services of Bank and its suppliers and
vendors; and (xiv) computer programs and software developed by
Bank or its consultants.
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